Many African American Families Are Struggling to Pay Back Parent PLUS Loans

The total student loan held by Americans exceeds $1.5 trillion. The Biden administration’s expected relief of $10,000 for some students will offer limited relief.

But a new report from The Century Foundation states that “the public needs to know that not all student loan borrowers are young, college-educated, and on the rise in their careers. Some of them are retired. Some never enrolled in college at all. And these borrowers, though little discussed, might be among the most deserving of debt relief.”

More than 3.7 million families are burdened with debt from the Parent PLUS loan program. The terms of these loans are less favorable for borrowers than those of other federal student loans for undergraduate education, and the options available to borrowers to reduce monthly payments, or to seek forgiveness of all or part of the debt, are less generous than for other federal student loans. The Century Foundation’s analysis shows that the median Parent PLUS debt load shouldered by parents is roughly $29,600. After 10 years — the length of the standard Parent PLUS repayment plan — more than half of the initial balance (55 percent) still remains, on average, because parent borrowers have trouble maintaining the repayment schedule; after 20 years, the remaining balance is still a whopping 38 percent.

The situation for Black parents is dire. According to the report:

  • Sixty-eight institutions show 10 percent of parents or fewer making progress after three years. Fifty-nine of them— nearly 90 percent—are HBCUs.
  • Ten years after starting repayment, the parents who received Parent PLUS loans and had children attending the top colleges for Black enrollment still owe on average 96 percent of their principal, compared to 47 percent among those whose children attended the top colleges for White enrollments
  • Many more Black parents (33 percent) who hold student loans for their children’s education also hold student loans for their own education, compared to just 13 percent among White parents who hold these loans.7
  • In the month they were surveyed, 37 percent of Black parent-borrowers said they expected to be unable to make a partial payment on their student loan bills, compared to 20 percent for all other groups.

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